Week in Politics: National puts on a family-friendly face

Analysis: National's childcare policy takes the lid off of how much the government is paying consultants, an inquiry into bank profits is very much on the cards and the "gobbledygook" health statistics.

Take millions of dollars away from big consultancy companies that are charging the government close to $9000 a week, per consultant, and give it to families struggling to pay $300 a week for childcare, per child.

National's childcare policy is clever and just about fireproof. It's sure to be popular, Labour can't attack it and the government has struggled to explain why its departments hire so much outside help at astronomic rates.

It's also given National's leader Christopher Luxon opportunities to show that his party is family-friendly and cares more about people than big business.

"To the big-time partners at consulting firms up and down New Zealand: thank you very much, but your money is going away and we're giving it to the hardworking families who deserve it," he told media after announcing the policy.

He didn't think that up on the spur of the moment.

National's policy would give a childcare tax rebate to families earning up to $180,000 a year, with the full $75 a week rebate available to families earning up to $140,000 reducing after that.

The details are in RNZ's report on Luxon's announcement, and political editor Jane Patterson said it was National's big pitch to voters to kick off election year.

The best Labour could come up with was Social Development Minister Carmel Sepuloni's response that the policy was "not well thought-out" because it didn't target those most in need, particularly those on the lowest incomes.

When Prime Minister Chris Hipkins was asked at his post-Cabinet press conference whether it was a bad policy he didn't really have an answer, saying National should comment on that.

Hipkins reminded reporters the government announced a childcare boost late last year, coming in on 1 April, which would change the threshold for childcare support and give more families access to it.

It's not as big as National's and it's more complicated. Here's how RNZ explained it at the time: "Exactly how much each family saves on childcare will depend on how many hours they work, their income, how long their children spend in childcare and the cost of it."

The first 20 hours of weekly childcare is free and the actual cost to parents after that varies.

In November last year, https://www.stuff.co.nz/business/130397657/by-the-numbers-the-true-cost-of-childcare Stuff investigated] and reported the average cost was $59.72 per 10-hour day, or $298.60 for a 50-hour week.

In Johnsonville, Wellington, it was $402 a week while in Kaitaia the average was $268.75 a week.

How it will be paid for

National says its policy will cost $249 million a year "and will be fully funded from money saved reversing the blow-out in wasteful spending on public sector consultants overseen by Chris Hipkins as public services minister".

That took the lid off the government's use of consultants and the jaw-dropping rates they charge.

National made the most of it, with public service spokesman Simeon Brown saying Labour had "created a gravy train for consultants" which would come to a halt when his party came to power.

Brown, in a statement, gave 13 examples of Labour's consultancy spend which included $53m on light rail and $10m on the TVNZ/RNZ merger, which has been scrapped.

He said more than $300m had been paid to the big four global consultancy firms since Labour took office - Deloitte, PwC, EY and KPMG. Deloitte was in the lead with $115.8mfollowed by PwC on $93.m.

The rates consultancy companies charge, now under scrutiny, was revealed by RNZ in November when it investigated the money being spent on what was then the planned merger with TVNZ.

Private consultants working on the merger were on contracts worth up to nearly $9000 a week, with the average nearly $6000 a week.

The bill for 17 of the largest contracts for individual jobs was almost $4m, on top of the $5m for the largest single contractor working on the transition, Deloitte.

An OIA response showed the most costly weekly contract was for a programme director at $393,000 over 44 weeks, or $8900 a week.

A change management leader was on a contract worth $8000 a week.

The report made a comparison - TVNZ's staff average pay was about $2100 a week last year, and RNZ's $1700 in 2020-21.

"These amounts were skewed upwards by high amounts earned by small numbers of staff," the report said.

Hipkins, under pressure over consultancy spending, said he was on record as always having wanted it cut and it was government policy to do that.

Luxon took him on in Parliament, asking when taxpayers could expect to see the "many millions of dollars" in savings from the government's policy to reduce the reliance on consultants and contractors promised in 2018.

Hipkins referred him to the detail of the spending "much of which was one-off and justified in the circumstances: around a third of that expenditure for example is related to IT expenditure which as the member will know is a consultant-led industry," he said.

Answering media questions, Hipkins gave examples of necessary consultant and contractor spending such as the architects who designed new school buildings.

Luxon used the publicity stirred up by the childcare policy to revisit one of his familiar complaints about the number of communications staff employed by the government. It didn't go well for him.

He told Morning Report: " We've got 200 people on a communications team inside the Ministry of Health… and at the same time they then go off and hire separate PR firms to continue to perfect and communicate their messages."

The Ministry of Health jumped on him. It didn't have 200 communications staff, it had 30.

Asked about this Luxon said the figure came from Rob Campbell, the sacked former chair of Health New Zealand/Te Whatu Ora - which is separate from the ministry.

Health New Zealand said it didn't know how many communications staff and contractors it had. It was combining nearly 30 organisations into one and was starting to look at how many comms people it would need.

Bank profits questioned

Luxon's deputy, shadow finance minister Nicola Willis, kicked off the second big story of the week when she called for a "short and sharp" inquiry into bank profits.

Willis gave it a family-friendly shove: "National has always stood for everyday New Zealanders."

Willis has the backing of ACT and the Greens, and she wants Parliament's Finance and Expenditure Select Committee to do it.

"I want the banks to be resilient. I want the banks to be strong, and I want there to be good competition," Willis said. "If there are excessive profits, because there is not proper regulation, that's a concern."

The reason why the pressure is ramping up for an inquiry into bank profits was explained by Stuff. In 2022 they made $7.4 billion in after-tax profits, the highest ever, and part of the reason was because even as they were lifting home loan rates they were also able to increase their margins.

The rates are still being lifted, with borrowers having to swallow big increases in home loan rates as they re-fix their mortgages.

The government isn't keen on a select committee inquiry. Hipkins told reporters it was looking at the best way to tackle it.

"Clearly, if we're going to do it, we're going to do it properly," he said.

He didn't think a select committee inquiry was the way to go. "A market study… is one of the options we're considering. I think that's probably the best way forward."

Finance Minister Grant Robertson said the same thing. "I don't think something as serious as this, which requires resourcing and powers to do a proper investigation, is the right thing for a select committee."

Asked whether he would prefer the Commerce Commission to do it, he said he wasn't suggesting anything as a decision hadn't yet been made.

Willis said a formal Commerce Commission inquiry would take a long time and be extremely resource-intensive, creating a lucrative opportunity for lawyers and consultants. It would be highly unlikely to give New Zealanders any immediate answers to what were urgent questions.

Willis is writing to the Finance and Expenditure Select Committee, of which she's a member, asking for the inquiry. The government can stop that happening because it has a majority on the committee.

All the signs are that there will be an inquiry and it will be the Commerce Commission doing it.

Dodgy emergency department figures

Another National MP made waves this week, and for good reason.

When health spokesman Shane Reti looked at the emergency department waiting times for 2022 put out by Health New Zealand, he couldn't believe what he was seeing.

The target is 95 percent of people being seen within six hours. Northland achieved a 99.7 percent success rate, according to the figures.

There were other glaring discrepancies, including the West Coast normally having between 680 and 1000 people attending - except for May when there were only 92 and then more than 8000 in November and December.

"They're just gobbledygook," Reti told Morning Report. "I mean, I live in Northland. I would love Northland ED to be at 99.7 percent. But the reality is I don't think any ED ever has been, and unfortunately Northland won't because at the same time they're reported at 99.7 percent Northland ED was urgently calling out for the army to staff their ED."

Health Minister Ayesha Verrall said there had been a spreadsheet mistake.

"People make mistakes with spreadsheets from time to time. I have asked Te Whatu Ora to improve the use of data overall," she said.

Health New Zealand national medical director Pete Watson said the figures were clearly inaccurate. He explained that 20 different districts had been merged and they collected data in different ways on different systems.

Improvement has been promised.

*Peter Wilson is a life member of Parliament's press gallery, 22 years as NZPA's political editor and seven as Parliamentary bureau chief for NZ Newswire.